Mourners at a memorial at the St Mary Magdalene Catholic Church in Rose Bay, Sydney, for Sister Philomene Tiernan, who was aboard the Malaysian Airlines flight shot down over the Ukraine.19th July 2014 Photo: Janie Barrett

The families of victims of airline disasters are automatically entitled to a minimum pay-out of at least $185,000 per life lost, as per the Montreal convention.

According to the convention, Malaysia Airlines is obliged to make these payments regardless of whether it is at fault.

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But any compensation claims above the minimum amount come down to demonstrating negligence on the part of the airline.

Among the 298 passengers and crew on the downed jetliner, 28 were Australian citizens and 8 others were permanent residents of Australia.

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Criminal act

Aviation legal experts say that as the tragedy appears to have been caused by a criminal act, as opposed to pilot error or mechanical malfunction, their claims to more compensation from the airline could be reduced.

Ukrainian Community placing a reef of flowers and black ribbons at the Mary MacKillop Memorial, St Mary Cathedral in Sydney In memory of the passengers and crew that died on the Malaysian MH17 flight Photo: Fiona Morris

"The apparent interference by a third party in this case puts Malaysia Airlines in a much stronger position," said John Mulligan, an International aviation law expert.

"[That is] relative to the majority of accidents to demonstrate that it wasn't at fault and should not have to pay for damages beyond the strict liability cap." he told the Wall Street Journal.

Ukraine and pro-Russian insurgents agreed on July 19 to set up a security zone around the crash site of a Malaysian jet whose downing in the rebel-held east has drawn global condemnation of the Kremlin. Outraged world leaders have demanded Russia's immediate cooperation Photo: AFP

“Our assessment is that Malaysia Airlines Flight 17 . . . was likely downed by an SA-11 missile, operated from a separatist-held location in eastern Ukraine,” US Ambassador to the United Nations Samantha Power told the UN Security Council.

She added that “because of the technical complexity of the SA-11, it was unlikely that the separatists could have effectively operated it on their own. We cannot rule out Russian technical assistance,” Power said.

This file picture taken on May 9, 2013 shows a Russia's air defence system Buk-2M arnoured launcher vehicles at the Red Square in Moscow during Victory Day parade. A Russian-made surface-to-air missile has emerged as the most likely cause of the suspected downing of a Malaysian airliner over Ukraine, analysts said Photo: AFP

However, Eurocontrol - the European air traffic control group said Ukrainian authorities had closed the airspace from the ground level to 32,000 feet but the airspace at 33,000 feet, where MH17 was flying at the time it was shot down, had remained open.

The International Air Transport Association (IATA) said airlines depended on governments and air traffic control authorities to advise which airspace was available for flight and stated that the airspace the aircraft was traversing was not subject to restrictions.

A memorial to Iran Air flight 655, which was shot down by a US military missile in 1988

Other airlines have chosen to avoid that airspace after the US aviation authority, the FAA, prohibited US carriers from flying over an area just south of the crash site in April.

Qantas has been flying 740 kilometres south of the MH17 flight path since then, and Cathay Pacific, Singapore Airlines and Emirates have all stated that they avoided the area.

In July at least two Ukrainian military cargo planes were hit by surface-to-air missiles.

Kevin Bartlett, a Brisbane-based aviation law expert told WSJ that passengers could try to argue the area was well known as an unsafe area to be flying over.

"The difficulty facing Malaysia Airlines here is that the passengers could argue that most airlines . . . knew the Ukraine airspace was a war zone and that two other aircraft had been shot down the previous week," he said.

Russia's role

There is another possible avenue for families of the victims.

They could sue the Russian government for allegedly supplying the BUK missile which shot down the plane to Russian separatists, a claim that the Russian government denies.

Gaining compensation from the Russian separatists themselves would prove very difficult to enforce, given that little is known about their legal and financial status.

This is despite Russian separatists allegedly breaking the international laws of war, were all fighters have a duty to distinguish between military and civilian object and not to target civilians.

There is a precedent for a foreign government paying out compensation to victims after an airline disaster.

In 1988, 290 people were killed after a US surface-to-air missile shot down Iran Air Flight 655. The US government subsequently paid out over $US61 million to families of the victims in compensation.

In that case, the Iran Air flight was clearly shot down by the US military. However, for this past week's disaster, apportioning blame to the Russian government for the actions of Russian separatists could prove much more difficult.